The State Bank of Pakistan (SBP) on Monday injected a cumulative Rs316 billion into the financial system through conventional and Shariah-compliant Open Market Operations (OMO) to ease liquidity pressure in the banking sector.
According to details, Rs238 billion were provided via a conventional four-day reverse repo OMO at an accepted rate of 11.07 percent. Meanwhile, Rs78 billion were channelled through a Shariah-compliant Modarabah-based OMO at an accepted rate of 11.14 percent.
Open Market Operations are among SBP’s primary liquidity management tools. Injections are made when banks face funding shortages, with the central bank lending against government securities such as Market Treasury Bills and Pakistan Investment Bonds. For Shariah-compliant transactions, GOP Ijara Sukuk are used as eligible collateral.
NBP briefing highlights strong capital position
Separately, the National Bank of Pakistan (NBP) held a corporate briefing to discuss its financial results for the first half of 2025, where management projected a steady earnings outlook despite regulatory changes and rising costs.
NBP reported that its deposits surged by 21.7 percent to Rs4.7 trillion in June 2025, compared with Rs3.9 trillion in December 2024. The bulk of this increase came from current deposits, which helped push CASA (current and savings account) deposits to 82.9 percent from 79.5 percent six months earlier.
The bank highlighted that its agri loan portfolio stands at Rs120 billion, of which Rs50 billion is backed by gold. During the 2022 floods, non-performing loans in the agri book were just 1.5 percent, indicating strong credit quality in the sector.
Management also shared that NBP has an investment portfolio heavily tilted towards government securities, with 53 percent in floating-rate Pakistan Investment Bonds and 29 percent in short-term T-bills. Its Eurobond and Sukuk investments stand at Rs70 billion, with a large portion maturing in FY26.
Regulatory and cost impacts
NBP disclosed that it classified realised gains of Rs6 billion to Other Comprehensive Income under new IFRS regulations. Furthermore, the central bank has gradually increased the market risk weight on FPOCI investments to 50 percent for 2025, 75 percent for 2026, and 100 percent for 2027. NBP has already taken the 50 percent adjustment this year, which trimmed its Capital Adequacy Ratio (CAR) by around 300 basis points.
The bank’s pension expense of Rs5 billion for 1H2025 has been fully recognised, making its cost-to-income ratio reflective of actual expenses. Despite these costs, NBP’s CAR remains strong at 27.28 percent, well above the 13 percent regulatory requirement.
Outlook and strategy
Looking ahead, NBP said its focus will remain on digital transformation, with transaction values of Rs4.7 trillion processed over the last five years, generating Rs13 billion in non-funded income revenue. The leverage ratio stands at 3.7 percent, higher than SBP’s minimum requirement of 3 percent.
The bank signalled that it will continue evaluating payouts in line with capital needs, while future growth is expected to be driven by equity investments and foreign bonds once they mature.
